Which of the following statements is true?
A) If a firm is experiencing economies of scale, diminishing marginal product has not set in yet.
B) No firm would ever operate at a level of output for which it experiences diseconomies of scale.
C) A firm can experience diminishing marginal product and economies of scale at the same time.
D) Diseconomies of scale is a short-run concept, while economies of scale is a long-run concept.

Question

Quizplus · Accepted Answer

It is possible for a firm to experience diminishing marginal product and economies of scale at the same time. DIMinishing marginal product is a short-run concept, while economies of scale is a long-run concept. Firms can experience diseconomies of scale in the long run, but it may still be optimal for them to operate at that level of output in the short run.

Which of the Following Statements Is True